Texan Tax System Places Greatest Burden on its Poorest Residents

August 30th

In a recent study conducted by the Census Bureau, statistics show that in the state of Texas, the tax burden is disproportionately shouldered by those who can least afford to pay: those living below the poverty line. This, in turn, causes more lower-income Texans to struggle with tax debt and face IRS penalties. The discrepancy in responsibility is considerable, which is ironic considering Texas Governor Rick Perry’s recent speeches, arguing against the injustice of poorer Americans not paying any income tax.

Even though Texas is commonly thought of as a low-tax state, recent studies have found this to only be the case for the richest few. Taxes paid by the poorest 20 percent of Texas households are actually the fifth highest in the nation. This group contains those with incomes averaging only $11,200 a year, not even enough to owe federal income tax.

Pushing Families Further into Poverty

According to the Tax Policy Center, nation-wide statistics show that three-fourths of the US households that pay no federal income tax (approximately 46 percent of total taxpayers) earn less than $30,000 a year.

Yet, these families still bear equally the burden of gasoline taxes, payroll taxes, excise taxes, property taxes and sales taxes. This means that in the end, these families will ultimately be paying a larger proportion of their income in taxes than wealthy households.

This imbalance is a particular issue in Texas, where they have a particularly strong reliance on property and sales taxes. Ultimately, the poorest fifth of Texans end up paying approximately 12 percent of their income in taxes, even without contributing income tax.

This figure stands in stark contrast to the tax burden shouldered by the wealthiest 1 percent of Texans. These individuals generally only pay approximately 3 percent of their income in state and local taxes.